Sugar Costs Undercut by Considerations of a International Provide Glut

March NY world sugar #11 (SBH26) on Thursday closed down -0.03 (-0.18%), and December London ICE white sugar #5 (SWZ25) closed up +0.40 (-0.09%).

Sugar costs settled combined on Thursday. Costs initially moved decrease on Thursday, with NY sugar posting a one-week low and London sugar posting a four-year nearest-futures low. Sugar costs are below strain as a result of a unfavourable carryover from Tuesday, when Covrig Analytics projected a world sugar surplus of +4.1 MMT for the 2025/26 season. Nonetheless, fund quick overlaying emerged close to the lows on Thursday, and sugar costs recovered, with London sugar pushing into constructive territory.

Sugar costs have ratcheted decrease over the previous seven months, with NY sugar posting a 4.5-year nearest-futures low (SBV25) final month on indicators of upper sugar output in Brazil. Final Thursday, Unica reported that Brazil’s Middle-South sugar output within the first half of September rose by +15.7% y/y to three.622 MT. Additionally, the proportion of sugarcane crushed for sugar by Brazil’s sugar mills within the second half of August elevated to 53.49% from 47.74% the identical time final 12 months. Nonetheless, cumulative 2025-26 Middle-South sugar output by mid-September fell -0.1% y/y to 30.388 MMT.

The outlook for greater sugar exports from India is unfavourable for sugar costs, as ample monsoon rains could produce a bumper sugar crop. India’s Meteorological Division reported final Tuesday that the cumulative monsoon rain in India as of September 30 was 937.2 mm, 8% above regular and the strongest monsoon in 5 years. On June 2, India’s Nationwide Federation of Cooperative Sugar Factories projected that India’s 2025/26 sugar manufacturing would climb +19% y/y to 34.9 MMT, citing bigger planted cane acreage. That might comply with a -17.5% y/y decline in India’s sugar manufacturing in 2024/25 to a 5-year low of 26.2 MMT, in line with the Indian Sugar Mills Affiliation (ISMA).

One other bearish issue for sugar was the latest assertion from sugar dealer Sucden that India could divert 4 MMT of sugar to make ethanol in 2025/26, which isn’t sufficient to ease the nation’s sugar surplus and will immediate India’s sugar mills to export as a lot as 4 MMT of sugar, above earlier expectations of two MMT. India is the world’s second-largest producer of sugar.

The outlook for greater sugar manufacturing in Thailand is bearish for costs after the Thai Sugar Miller Corp projected final Wednesday that Thailand’s 2025/26 sugar crop will improve by +5% y/y to 10.5 MMT. On Could 2, Thailand’s Workplace of the Cane and Sugar Board reported that Thailand’s 2024/25 sugar manufacturing rose +14% y/y to 10.00 MMT. Thailand is the world’s third-largest sugar producer and the second-largest exporter of sugar.

On Tuesday, NY sugar posted a 1.75-month excessive as indicators of decrease sugar content material from this 12 months’s Brazil sugar crush sparked a quick bout of quick overlaying in sugar futures. Final Thursday, Unica reported that the sugar content material in Brazil’s Middle-South sugarcane crushed cane within the first half of September dropped to 154.58 kilograms per ton (kg/ton) in comparison with 160.07 kg/ton in the identical interval a 12 months earlier.

On August 29, the Worldwide Sugar Group (ISO) forecast a world sugar deficit for the 2025/26 season, the sixth consecutive 12 months of sugar deficits. ISO tasks a world 2025/26 sugar deficit of -231,000 MT, down from the -4.88 MMT shortfall in 2024/25. ISO additionally tasks 2025/26 international sugar manufacturing will rise by +3.3% y/y to 180.6 MMT, and 2025/26 international sugar consumption will improve +0.3% y/y to 180.8 MMT.

The USDA, in its bi-annual report launched Could 22, projected that international 2025/26 sugar manufacturing would climb +4.7% y/y to a file 189.318 MMT and that international 2025/26 human sugar consumption would improve +1.4% y/y to a file 177.921 MMT. The USDA additionally forecasted that 2025/26 international sugar ending shares would climb +7.5% y/y to 41.188 MMT. The USDA’s Overseas Agricultural Service (FAS) predicted that Brazil’s 2025/26 sugar manufacturing would rise +2.3% y/y to a file 44.7 MMT FAS predicted that India’s 2025/26 sugar manufacturing would rise +25% y/y to 35.3 MMT as a result of favorable monsoon rains and elevated sugar acreage. FAS predicted that Thailand’s 2025/26 sugar manufacturing will climb +2% y/y to 10.3 MMT.

On the date of publication, Wealthy Asplund didn’t have (both immediately or not directly) positions in any of the securities talked about on this article. All data and information on this article is solely for informational functions. This text was initially printed on Barchart.com